University of Engineering and

Technology, Lahore

International Business Management

International Technology
Transfer

Presented by
Ahmad Hussain
Roll # MBA3.5(16)-530
Presented to
Brig. Riaz Toor

10-10-2019
 The Essences and Forms of the
International Technology Transfer
The international technological exchange (technology transfer) is
understood to be the complex of the economic relations of different
countries concerning the transfer of scientific and technological
achievements.
The scientific and technical knowledge being bought and sold in the world
market, which is the result of scientific research, engineering and
experience of their commercial exploitation, as well as engineering
services for the use of scientific, technical, technological and managerial
developments. They are the objects of intellectual property, possessing
both scientific and commercial values.
As commodities they include the following:
- a patent is a certificate, which is issued by the proper government agency
to an inventor and certifies its monopoly for the use of the invention;
- a copyright is an exclusive right of an author of a literary, audio or video
product for display and reproduction of the work;
- a trademark is a symbol (a picture, graphics, combination of letters, etc.)
of a particular organization which is used to personalize the product
manufacturer and which cannot be used by other organizations without
the official permission of the owner;
- industrial designs, which must be new and original;
- non-divulged information (know-how), which is secret and kept in
secret, has commercial value and is provided to the government and
governmental organizations as a condition of approval for the marketing
of certain products;
- a variety of technical, design, commercial and marketing documentation.
These products of intellectual work belong to so-called nonmaterial forms
of technology, and trade operations in international practice are
commonly referred to as international technological exchange.
Thus, international technological exchange is understood to be the
complex of economic relations between contractors of different countries
for the transfer of scientific and technological achievements (nonmaterial
types of technology) with scientific and practical values, on the
commercial basis.
It should be noted that there are also noncommercial forms of
international technological exchange:
1. technical, scientific and professional journals, patent publications,
periodicals and other specialized literature;
2. database and databanks;
3. international exhibitions, fairs, symposia, conferences;
4. exchange of delegations;
5. migration of scientists and specialists;
6. training of scientists and specialists in companies, universities and
organizations;
7. education of undergraduate and graduate students;
8. activities of international organizations in the field of science and
technology.
Under modern conditions, international technological exchange has
certain features [8, p.264]:
1. The development of market of high technologies. The generally
accepted classification of high technologies for exports and imports of
products, containing new and leading technology, is the classification
developed in the USA, which is used by international organizations for
statistical comparisons of different countries.
The classification system allows to explore the trade in products of
high technology in 10 main technological sectors: biotechnology; human
life science technology; optoelectronics; computers and
telecommunications; electronics; computerized production; new
materials; aerospace technology; armament; nuclear technology.
2. The monopoly of large firms in technology markets. Research and
development are concentrated in the largest firms of the industrialized
countries, since only they have sufficient financial means for expensive
research.
Transnational corporations actively attract for R&D their foreign
subsidiaries, characterized by increasing the expenses for scientific
research in the total amount of the expenses of TNCs.
3. Technology policy of TNCs. In recent years there have been changes
in the trends of R&D of TNCs.
Research moves to the industries that determine success in the
production and marketing activities:
• enhancement of traditional kinds of products to meet the
requirements of the world market concerning the indicators of in
material intensity, energy efficiency, security, reliability, etc.;
• creation of innovative products, market research, where you can
expect high returns;
 • improvement of the existing technology and creation of a new one.
TNCs apply new approaches to the transfer of scientific and
technological
• achievements:
• sale of licenses at the initial stages of the life cycle of products, in
order to cover the expenses for R&D by incomes from realization
of their results;
• establishment of exclusively high prices for the patented products,
and limitation of the production and output of a new product by
license buyers;
• agreement undertaking between TNCs to obtain exclusive rights to
the patents for the most important inventions. The use of patents to
control technique development or to hamper this development;
• deprivation of TNCs subsidiaries the autonomy in the choice of
equipment and technology. They should be guided by the general
licensing policy
• within the TNCs;
• TNCs transmission of licenses in non-commercial terms to their
subsidiaries and affiliates;
• the establishment of strategic alliances between TNCs from
different countries to solve jointly the scientific and technological
problems.
4. Relationship between TNCs and the developing countries. TNCs try to
create a structure of international division of labor, which would provide
economic and technical dependency of the developing countries.
For example, in these countries, TNCs create enterprises that
produce components that are supplied to the subsidiaries in other
countries. Transferring the technology for manufacturing intermediate
products to the countries with cheap labor force, a TNCs reduces the cost
of their goods.
 TNCs often moves to the developing countries the production of
goods, the lifecycle of which expired and the profit from sales gradually
decreases. They receive these goods at low prices and then sell them
through their marketing network under their well-known trademark,
getting a higher profit.
A technology, which is transferred to the developing countries, is
generally ill-adapted to their possibilities, because it takes into account
the level of development and the structure of the industry in the developed
countries.
The developing countries account for about 10% of international
technological exchange due to the small capacity of their technological
market.
5. Participation in international technological exchange of "venture"
firms (small and mid-sized firms employing up to 1 thousand people). The
advantage of these firms in the market of technologies is a narrow
specialization.
Producing a limited product line, these firms have access to highly
specialized global markets; they do not bear additional expenses for
market research, advertising; they pay more attention to the direct solving
of scientific and technical problems.
6. Development of international technical assistance. This assistance is
provided by the developed countries to the developing countries and
countries with economies in transition in the field of the transfer of
technical knowledge, experience, technologies, technology-intensive
products, personnel trainings.
The main buyers in the market of technologies are as follows:
foreign subsidiaries of TNCs; individual independent firms.
Transfer of TNCs' new technologies to their foreign branches is
conditioned by the fact that:
 • overcoming the disagreement between the need for greater use of
the latest technical developments with a view to maximize the
profits and resulting there from threat of losing their monopoly for
scientific and technological achievements;
• decreasing the specific costs for R&D;
• excluding the outflow of production secrets beyond the boundaries
of
• TNCs;
• increasing the profit of the parent company (since in most
countries the payments for the new technology reception are
exempted from taxes).
Independent firms usually buy technology of the industries where the
expenses for R&D are small (metallurgy, metal processing, textile and
clothing industry).
Products of intellectual labor are sold in the world market through sales
or by means of establishing the relations arising in connection with
obtaining of a temporary right to use the results of scientific research and
development on the basis of international licensing agreements, as well as
contracts for engineering services.